Academy Chain Hit with Official Warning over Accounts: News

Article excerpt

One of the country's largest academy chains has been hit with an official warning by the government over serious concerns about the financial management of its schools, TES can reveal.

E-Act, which runs 31 schools, has become the first sponsor to be issued with a "financial notice to improve" by the Education Funding Agency (EFA) after the government body found a string of "weaknesses" in the reporting of its schools' accounts.

The decision to issue the warning raises further concerns over the rapid expansion of academy chains and their capacity to manage the performance and standards of their schools.

The news comes just weeks after it was revealed that the country's largest academy sponsor, Academies Enterprise Trust, which runs 65 schools, had been barred by the Department for Education from taking on any new schools because of fears around its continued growth.

The notice to improve is not the first time concerns have been raised over E-Act's financial arrangements. In 2008, a government inquiry found that the sponsor had failed to comply with financial management requirements, leading to the resignation of the then chairman Lord Bhatia.

The chain courted more controversy over the pay and expenses of its director general, Sir Bruce Liddington. The former schools commissioner received almost Pounds 300,000 in 2010-11 in pay and pension contributions, making him one of the highest paid people in education. He was also forced to pay back expenses after it emerged that he claimed for a stay in a luxury hotel.

Sir Bruce stated in 2011 that he wanted to create a "super-chain" of 250 academies within five years, but he was forced to scale back his plan after it led to unrest in the chain's boardroom.

Among the concerns listed by the EFA's warning was that E-Act did not have enough data coming from each of its academies to properly hold its schools' finances to account.

TES understands that the chain has spoken to schools minister Lord Nash, telling him that it will not attempt to take on any more schools until the EFA is satisfied with its response. The chain has three months to respond to the warning.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, said the development called into question the DfE's policy of allowing rapid expansion of academy chains.

"There are very big questions to be answered here," Dr Bousted said. "No chain should be allowed to expand unless it can demonstrate that it has effective systems in place. …